The Korean antitrust body has named Mr Lee Jae-yong as heir apparent of the Samsung empire, which includes the country's biggest life insurer and non-life company. By this decision, Mr Lee takes the place of his ailing father, Samsung chairman Lee Kun-hee.

The Fair Trade Commission launched a process in January to review its list of the owners of the country’s top 49 conglomerates. The FTC took into account leaders’ direct and indirect stakes in the conglomerates and their direct and indirect influence on management activities and the appointment of executives, reports JoongAng Daily.

The antitrust regulator sets boundaries for conglomerate families, nonprofit corporations, affiliates and executives based on their relationship to the owner.

All companies under the leader have to make regulatory filings under the Fair Trade Act, and family members are scrutinised for any personal gain they take from the companies.

Even though Lee Kun-hee is still the biggest Samsung stakeholder, he is bedridden and unable to manage the conglomerate. Shin Bong-sam, head of the business group bureau at the FTC, said, “It’s certain that he can’t exercise influential power, directly or indirectly.”

His son, Lee Jae-yong, controls Samsung Electronics with a 17.2% stake in Samsung C&T and a 8.3% stake in Samsung Life Insurance, which both control Samsung Electronics as part of Samsung’s labyrinthine cross-shareholding structure. Samsung Life is the largest life insurer in South Korea.

In response to the FTC’s move, Samsung said it won’t introduce any changes to Samsung affiliates, nor will it change Lee Jae-yong’s role within the conglomerate.

In April, the financial authorities stepped up pressure to urge Samsung Group to ease its complex cross-shareholding structure apparently designed to increase owner family members’ control over Samsung affiliates.

Mr Choi Jong-ku, chairman of the Financial Services Commission, had suggested that Samsung Life Insurance sell the vast majority of its KRW27.6 trillion (US$25.7 billion) worth of shares in Samsung Electronics before it is forced to do so by a proposed amendment to the insurance law.

“Before the law comes into effect, I hope Samsung Life Insurance will bring up alternatives in a voluntary and gradual manner,” he said.

Mr Choi was referring to a pending amendment aimed at reducing the amount of shares that an insurance company can hold in an affiliate.

Currently, an insurance company is only permitted to invest a maximum of 3% of its assets in an affiliate, based on the acquisition cost. The reform will change the price standard from the acquisition cost to the current market price, a system currently used for banking and securities companies.

Samsung Life Insurance’s 8.23% stake in Samsung Electronics is permitted under the current law because it had cost around KRW569 billion at the time of acquisition, less than 3% of the company’s net assets. But when the holding is converted to current market value, it exceeds KRW27 trillion, which is well past the 3% limit.